At the beginning of the year Australia’s Foreign Investment Review Board (FIRB) introduced guidelines requiring that foreign investors demonstrate that agricultural land they intend to acquire has been part of a public sales process and marketed widely to potential Australian bidders for a minimum of 30 days, and Australian bidders have had an opportunity to participate in the sale process. You can read our update here.
In response to stakeholder feedback, these requirements have recently been amended to apply more flexibly with FIRB adjusting the requirements as articulated in a number of its guidance notes.
The key changes include:
- Some exceptions to the previous requirement which applied the sale process rule to all investments in agricultural land by foreign persons. The requirement will now only apply to sales of agricultural land that are intended to be used for a primary production business or residential development. The requirement will no longer apply to leasehold interests or licences, except where they have freehold characteristics. Internal reorganisations where the land is already held by a foreign person and there is no change in control will also be exempt.
- Alternative forms of sale process (other than a 30 day public marketing campaign) that provide equal or greater participation by Australian bidders will now meet the open and transparent sale process requirement.
- Foreign investors that acquire agricultural land and that allow significant Australian participation in the primary production business will generally not be captured by the requirement. This includes where a foreign person is majority Australian controlled (through control, ownership and/or beneficial interest), or where Australians or Australian entities have a significant opportunity to invest in the business such as through ASX listing.